Many businesses began 2022 with optimism and excitement for the return to normality following the Covid-19 pandemic. However, when we take a look at the latest insolvency figures, the optimism isn’t as present. They show us the reality of the situation for many businesses.
Corporate Insolvencies
The first quarter of 2022 saw 4,896 corporate insolvencies. This is an increase of 6.1% from A4 of 2021 (which saw 4,615 corporate insolvencies). The 2022 Q1 numbers were +112% on Q1 of 2021, which saw 2,309 corporate insolvencies. Again, this was higher than Q1 of 2019, which saw 4,182 corporate insolvencies. In fact, CVLs aka Creditors Voluntary Liquidations reached a 60-year high.
Personal Insolvencies
It’s much the same for personal insolvencies, with numbers at their highest since 2020 Q4. The number of personal insolvencies in 2022 Q1 are also the highest for Q1 since 2019. This could be because of the knock-on effects of the pandemic, plus the added effects that the rising cost of living is having on many.
The forecast for 2022
We are set to see this trend continuing into the later half of 2022. With UK business insolvencies to exceed approximately 20,000. However, we must consider the continuation of the rising costs of living, fuel, and other essentials for businesses. If these do rise further, insolvencies could hit 30,000 by Q4 of 2022.
Business owners should be aware of the signs of financial distress and seek advice or assistance straight away. Having this conversation at the early stages normally leads to a higher percentage of recovery. Plus, the extra time will mean you will probably have more options and more time to make these big decisions.
About the author
Iain Bould
Iain heads Beeston Shenton’s commercial litigation department.
Iain has 30 years of experience in Commercial Debt Recovery and Insolvency fields having worked in both Private Practice and Industry and has extensive experience working across all industry sectors and has particular expertise in working with Insolvency Practitioners in advising and recovering outstanding insolvent company ledgers. Iain brings a pragmatic and commercial approach.
Contact us for a free consultation
If you need any advice or further information regarding this article, please contact us.
As discussed above we offer a free initial consultation and if clients have a viable claim, we offer a variety of retainer options including no win – no fee arrangements. Every case or potential case will be assessed, on its own merits.
If you have found this article interesting and would like to learn more about how Beeston Shenton can help you please feel free to contact the writer, Iain Bould, at iain.bould@beestonshenton.co.uk or via the contact page on the website.
